The Hindu Business Line : A burning question on PAN

I am an NRI, but when I was a resident (5-6 years back) I had applied for PAN (Permanent Account Number) and got one. However, no PAN card was mailed to me (my chartered accountant at that time enquired with the tax office to obtain my number), but I have been using that number since. I would like to obtain a card and do not know what the procedure is? Emails to the tax office regarding this are never responded to. Could you tell me how to go about this process?

Ramanathan, email

In terms of Rule 114C, you are not required to have PAN and, in fact, the entire Section 139A dealing with PAN is not applicable to you. Yet, having applied for the same and having come to know the number, you should have received the card as well. You may have to keep pestering the Department if you are keen on getting the card. But I don't understand why you should be so keen.

Cost of new asset

I owned a long-term capital asset at place A. Now I have shifted to place B and I intend to build a house here. I want to know whether the brokerage and legal fees at place A can be included in the cost of the old asset.

Can the brokerage, legal fees, stamp duty, registration and screening fees, transfer fees in Municipality, electricity deposit at place B be counted in the cost of the new asset. Can fixtures like inverter, solar heater, DTH connection, tube lights, etc., at place B be counted in the cost of new asset. I paid an amount to packers and movers to shift my household goods from place A to place B. Where can I claim this amount to reduce my capital gains?

Dr Manohar, email

Brokerage, legal expenses and registration fees are all part of the cost of a house. But not electricity deposit. Similarly, electrical fittings and other assets are assets in their own right and cannot be squeezed into the cost of the house they are fitted in. The amount paid for shifting cannot be claimed as deduction under any head.

TDS on tour operations

A principal tour operator from Delhi contracts with a tour agent in Kerala (both are companies registered under the Companies Act) to prepare an itinerary for accommodation, transport and local sightseeing for guests arriving from Delhi.

The tour agent from Kerala contracts with transport operators, hotels and guides and obtains their rates. A mark-up is added and a rate is given to the principal operator for hotel accommodation, transport and guide services. The total bill amount is in excess of Rs 50,000. The tour operator from Kerala wants to know at what rate the principal agent should deduct TDS?

Should it be at 2 per cent plus applicable surcharge and cess under Section 194C or at 20 per cent plus applicable surcharge and cess on the hotel accommodation part of the bill (assuming the accommodation cost alone exceeds Rs 120,000) and at 2 per cent plus applicable surcharge and cess)? If in a financial year the total payments to a particular hotel (payments are on behalf of different guests and different tour operators) exceed Rs 20,000, should TDS be deducted under Section 194C by the tour operator on payments made to the particular hotel?

In case the annual payment exceed Rs 120,000, should TDS be deducted under Section 194 I?

Sooraj Ramachandran, email

I think the entire question needs to be split into two. The Delhi tour operator is making payment to the Kerala agent for his services, which includes, besides his own mark up, the room rent, etc. On this, the tax deductible is 2 per cent plus education cess in terms of Section 194C. Now if the Kerala agent is going to make payment to a particular hotel in excess of Rs 1.20 lakh, he would have to deduct tax at source in terms of Section 194I. You would agree that the Delhi agent is not the person responsible for paying the Kerala hotels.

Workingwoman's woes

I am a workingwoman and my total income for the assessment year (AY) 2005-06 was Rs 1 lakh, which is less than the taxable limit for women. However, tax was deducted from my pay by my employer. How do I claim the refund? What kind of documents will I need from my employer as an evidence for the same? Do I have to file return? Can I do it before March 31, 2007, without attracting any penalties?

Aditi Aggarwal, email

You certainly can get the refund by filing a return by March 31, 2007. You must file with your return the statement in Form 16, which every employer must give in evidence of having deducted tax at source. I think you should have prevented this from happening given the fact that the tax-free limit for you is not Rs 1 lakh but Rs 1.35 lakh. Anyway when vanguard action is not taken, one has to take rearguard action.

S. Murlidharan

(ASK! Send in your queries on accounting, auditing, corporate law and taxation to ask@thehindu.co.in.)

http://MentorQA.blogspot.com

S. Murlidharan

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